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After President Biden’s trip to Ukraine, Russian president Vladimir Putin suspended the country’s participation in the New START treaty, a nuclear arms control pact with the U.S.
Putin also warned of a “global war” as he doubled down on Ukraine, with threats of nuclear force. According to The Sun, “Moscow's nuclear doctrine clearly states their forces can use nuclear weapons when the country's "very existence" is at risk. Elsewhere in the speech, Putin also vowed Russia would ditch participation in a key arms control treaty - further ramping up the nuclear danger with the West.”
In response, U.S. Secretary of State Antony Blinken said, “We’ll be watching carefully to see what Russia actually does, we’ll of course make sure that in any event that we are posturing appropriately for the security of our own country and that of our allies,” as quoted by CNN. “I think it matters that we continue to act responsibly in this area… it’s also something the rest of the world expects of us.”
The options plays you execute will depend largely upon two things: your risk tolerance and your portfolio goals. Risk and reward are directly proportional – the higher one is, the higher the other is as well. If you have a high risk-tolerance and your aim is to make 200 percent on your money, then you’re probably going to follow an aggressive option strategy. If your risk tolerance and your investment goals are more middle-of-the-road – meaning, you’ll be satisfied with say, a 30 percent return and don’t want to risk more capital than is absolutely necessary – then you’re likely to adhere to a more conservative spreading technique.
Spreading, which involves selling one type of option and buying another, is one of the most common ways to create positions that match your outlook for a given stock or index and limit your risk. Depending on the type of strategy you choose, these spreads can limit your upside potential as well. The trade-off of capping your risk, in return for a limit on the upside, usually is one that many investors are willing to make.
The first profit opportunity we will consider this week is a stock purchase in HPE stock, or Hewlett Packard Enterprise Company. This technology communication company operates to create data solutions for clients internationally.
November 2022 began the buy signal for HPE on the monthly chart. After a few retracements, HPE’s bullish movement resumed.
We can see the movements HPE experienced that pushed the stock above the Upper Channel. It’s currently closer to the Middle Keltner Channel.
We recommend buying HPE stock at current price levels.
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